The payment of Gratuity act 1972
V Sharma
(Querist) 18 June 2009
This query is : Resolved
My brother resigned from Haryana State Elec. Board (Now HPGCL) after serving 10 years and 9 months as Junior Engineer. He applied for gratuity but HPGCL refused that as per Panjab CSR gratuity is not applicable on resignation.
But as per 'The payment of Gratuity Act-1972' employee is eligible for gratuity if he/she has served for more than 5 years even after resignation.
My queries are-
1. Can state act supersede central act under labour laws?
2.Whether my brother is eligible for gratuity or not?
3. How can he put his case for gratuity payment under 'The payment of Gratuity Act1972'?
4. Is there any supreme court ruling regarding above?
regards,
A V Vishal
(Expert) 18 June 2009
PETITIONER:
BAKSHISH SINGH
Vs.
RESPONDENT:
DARSHAN ENGINEERING WORKS
DATE OF JUDGMENT11/10/1993
BENCH:
SAWANT, P.B.
BENCH:
SAWANT, P.B.
YOGESHWAR DAYAL (J)
CITATION:
1994 AIR 251 1994 SCC (1) 9
JT 1993 (6) 85 1993 SCALE (4)99
ACT:
HEADNOTE:
JUDGMENT:
The Judgment of the Court was delivered by
SAWANT, J.- These two appeals one by the Union of India and the other by the
aggrieved employee are directed against the decision dated March 24, 1983 of the
Punjab and Haryana High Court whereby the High Court has struck down Section
4(1)(b) of the Payment of Gratuity Act, 1972 (hereinafter referred to as the
'Act') as being violative of Article 19(1(g) of the Constitution of India.
2. The admitted factual matrix of the case is in a narrow compass. Bakshish
Singh, the appellant-employee joined the services of the
11
respondent-M/s Darshan Engineering Works as a Fitter on March 2, 1968 and
resigned from service on December 10, 1978 after a total period of continuous
service of more than 10 years. His last drawn wages were Rs 335 per month. It is
not disputed that at the time he joined the employment on March 2, 1968, his age
was 54 years 3 months, his date of birth being December 17, 1913. This was known
to the respondent-employer.
3. The Act came into force w.e.f. September 21, 1972. On the employee's
resignation w.e.f. December 10, 1978 which was accepted by the respondent-
employer, he claimed gratuity under Section 4(1)(b) of the Act. His claim not
having been accepted, he approached the Controlling Authority under Section 7 of
the Act. The claim was resisted by the employer on the ground firstly that the
employee was entitled to gratuity only till the date he reached his
superannuation age which was 58 years and since he had not completed 5 years of
service by the time he attained 58 years of age, he was not entitled to gratuity
under Section 4(1) of the Act. Secondly, it was contended that in any case the
amount of gratuity payable to the employee was only for the period upto the
superannuation age and since he was drawing wages of Rs 230 per month on the day
he attained the superannuation age, he was entitled to a sum of Rs 460 only,
being the gratuity calculated at the rate of 15 days' salary per year of service
till the date of superannuation.
4. Both the contentions were negatived by the Controlling Authority by pointing
out that Section 4(1) provided for payment of gratuity to the employee on the
termination of his employment after he has rendered continuous service of not
less than five years on the occurrence of any of the three events viz., (a) on
the employee reaching his superannuation age, or (b) on his retirement or
resignation, or (c) on his death or disablement due to accident or disease. In
case of the third event, the qualifying continuous service of five years is not
necessary. The 'retirement' is defined by Section 2(q) of the Act to mean
'termination of the service of an employee otherwise than on superannuation'.
The first two events are independent of each other. Since in the present case
the employer had not chosen to superannuate the employee on his attaining 58
years of age and had continued him in service till the employee himself resigned
on December 10, 1978 by which date he had completed more than 10 years of
service, the employee was entitled to the gratuity for the period of his entire
service upto the date of his resignation. The Controlling Authority, therefore,
calculated the amount of gratuity due to the employee as Rs 1782 at the rate of
15 days' wages per year of service for all the IO years taking the. last drawn
wages of Rs 3 35 per month as the basis of the said calculation. This order was
challenged by the employer before the Appellate Authority under the Act. The
Appellate Authority confirmed the finding of the Controlling Authority and
dismissed the appeal. In the writ petition
